High-speed rail bidder says when costs go up, it's the client's doing

In response to

SACRAMENTO  Los Angeles construction magnate Ron Tutor, whose company wants to partner in building the first segment of California’s high-speed rail system, returned fire on Tuesday at critics who say he has a history of cost overruns and expensive lawsuits.

His joint venture of Tutor Perini/Zachry/Parsons has submitted the “best apparent value” bid of $985 million for the first segment of the rail line, below the $1.09 billion proposal by the next-lowest bidder. Rail officials had estimated the cost of the first segment at $1.2 billion to $1.8 billion.

A U-T Watchdog report on Monday focused on persistent criticisms of Tutor and his firms over the years. Tutor was unavailable for comment, but the Watchdog reached him by phone on Tuesday.

“You’re picking up on the 20-year-old (baloney) that we get jobs and we get a lot of change orders, right?” he asked. “And you still believe that (baloney)? I am getting tired of refuting it. It’s just such drivel.”

Eleven major projects in the San Francisco Bay Area completed by Tutor in the last 12 years cost local governments $765 million more than they expected, or 40 percent above the initial bids, according to an August report by the Center for Investigative Reporting, a media partner of U-T San Diego.

The U-T quoted Kevin Williams, a former San Francisco contracting officer who has testified in court against Tutor. Williams predicted the construction tycoon “is going to make up the difference somehow by lowballing. That is as old as history itself in the construction industry.”

Tutor’s companies have a long history of courtroom battles in Los Angeles, San Diego and San Francisco, where officials in 2002 accused him of deliberately bidding low and then charging more for an airport expansion.

Tutor said his legal setbacks are well-documented but his victories often ignored. He said clients initiated project changes that increased costs.

He pointed to a lengthy profile in the Los Angeles Times from 2003 that quoted the late Mayor Tom Bradley characterizing him as “a change-order artist.”

“Nobody ever bothered to look and see whether it was truth or rhetoric,” Tutor said.

He said starting from the first week, Los Angeles airport officials began sending change orders and adding work that was previously deleted out of fear they would exceed their budget.

“These were owner-initiated changes,” he said. “But the label stuck.”

The 72-year-old is expected to come under increasing scrutiny from the media as the high-speed rail authority moves toward inking a contract for the first segment in the coming weeks. As the lowest bidder, his partnership has an advantage over the other four partnerships.

Tutor says he expects to get the contract for the first segment — a 28-mile stretch from Madera to Fresno in the San Joaquin Valley — and then compete for the other segments of the $68 billion project.

The Watchdog asked whether Tutor could guarantee to hold down costs, and he responded, “What do you think a contract is? I am not on a cost-plus. Our contract is a guarantee. I swear to God.